Flexible annuity demand going strong

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A study looking at independent financial adviser's (IFA) views on retirement planning has revealed a significant uplift in those favouring flexible annuity products.

The report by the Lincoln Financial Group has revealed that almost three quarters (73 per cent) of IFAs believe that flexible annuities – also known as variable annuities – offer a valid alternative to traditional annuities and income drawdown.

This is a significant improvement on the 55 per cent of IFAs who held the same opinion just two years ago. Furthermore, over half the IFAs who responded said they felt the traditional annuity product had become outdated.

Fifty seven per cent believe they don't offer enough flexibility for today's retirees, while 55 per cent said traditional annuities do not provide enough protection against inflation.

The variable annuities market has been quite unpredictable recently because of a rocky stock market and the also disappearance of The Hartford, which pulled out of the UK market recently.

However, more than one in ten (13 per cent) IFAs believe that the majority of their clients would now consider such a product, the study revealed.

"There had been a significant shift in attitudes towards flexible annuities, with many feeling there is a real need for flexible options in the current market," said Simon O'Connor, head of products and marketing at Lincoln.

"Our study reveals that flexible annuities are now being seriously considered as alternatives to the more traditional and well known retirement options."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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